Are you struggling to collect your rent on time?
Even a small delay in receiving your rental payment can impact your bottom line. You might feel like it's out of your hands, but there are actually a number of things you can do to make sure you receive your rent when it's due.
Read on for 5 tips to ensure you know the best way to collect rent on time.
1. Go Automatic
The best tip for getting paid rent on time is to make tenants pay in via an online system. This is good as it removes the chance of human error. Tenants can't 'forget' to pay their rent.
There are many automatic rent payment options out there including:
- ACH Debit - with an Automated Clearing House you can withdraw rent from the tenant's bank account.
- Online Bill Pay - ask your tenants to set up their rent payment as a recurring bill with the bank.
- Collecting Post-dated checks - collect 12 post-dated checks to cover each month in the year.
2. Choose Your Tenants With Care
Only choose qualified tenants with a good rental record. Have set criteria for what sort of tenant you want like income requirements. Where possible, you should set this at least 3 times the rent amount.
Get an up-to-date credit report for the tenant and make sure they have good credit. Always check references. If they didn't pay on time with their previous landlord, chances are they won't pay on time for you either.
3. Be Consistent
Consistency is key in avoiding late rent payments so treat everyone the same. As unfortunate as someone's individual circumstance might be, separate your emotions.
Always deal with it with professionalism and think of your bottom line as a business. You don't want that one small pass you gave someone to become the norm for them and other tenants going forward.
4. Enforce Rent Collection Policy
Keep your rent collection policies firm and consistent is the best practice. This will ensure regular, on-time payments. In your lease make sure you state exactly the following:
- The exact amount of rent due each month.
- Where tenants should make payments to.
- Accepted payment methods.
- The date the rent is due and any grace periods.
- The repercussions (e.g: fees) of late payments or bounced checks.
At some point, a good, regular tenant might fall on hard times. If you're sure that it's a one time issue, then you can cut them a little slack. But be firm with your policy going forward. This will prevent them from taking advantage of your leniency.
5. Always Be Professional
It can be incredibly frustrating to jump through hoops to collect your rent. But, you should never let it affect your professionalism. Don't threaten to cut off your tenants' utilities. In fact, don't rely on threats full stop.
This could encourage them to make things hard for you in the future on purpose. If you have to go down the path of eviction, the courts are unlikely to tolerate any personal threats or attacks against your tenants.
Get Clued Up on the Best Way to Collect Rent
So there you have it! Follow these 5 tips on the best way to collect rent and you'll be sure to avoid any unnecessary late payments.
Always be consistent and professional in how you treat your tenants. If you're going to cut a tenant some slack on their rent, it's advisable you only do this once. You don't want them to take advantage of you.
If you found this article helpful, check out our other blog posts for more property insight.